Industry News

TMT office space 19th March 2014

The changing face of the City property market saw the technology, media and telecommunications (TMT) sector take up nearly a quarter of all space in the Square Mile last year, according to a new report published today by the City of London Corporation and the City Property Association.

In 2013, TMT companies accounted for the largest proportion (23%, 1m sq ft) of City space, followed by other professionals (excluding legal) and financial occupiers (18%). By comparison, it provided between 7 to 9% of take-up during the 2004-2009 period – but then doubled its share in 2010 and has continued to rise.

This trend is driving demand for flexible and adaptive office space in the City. This has been reflected in the growing number of businesses in serviced premises, which climbed from nearly 700 in 2003 to almost 2,400 firms in 2012 as recorded by Trends Business Research (TBR) in a report on Firm Migration in January. This continued in 2013 with an additional 12 service office centres opening.
The City’s forecast office employment growth of 42,000 staff between 2013 and 2023 will require an increase in stock of up to 5.1m sq ft.

Mark Boleat, policy chairman at the City of London Corporation, said: “Businesses are increasingly open-minded about location as technology and transport improvements such as Crossrail increase connectivity across London. This means the City has to ensure its office stock is fit for changing occupier demand. This could mean, for example, that although the trend towards a smaller number of large buildings may continue we will see increased sub-divisibility to cater for smaller occupiers.

“The Square Mile is playing an increasingly important role in providing space and the right business environment for “Tech City” businesses as they mature and move closer to their markets. We want the next Facebook, Twitter or Google to emerge from London. That can only happen, however, if they have access to the suitable space that will enable them to grow and flourish.”